McCarthy has emerged as the leading contender to succeed Giovanni Trapattoni as Ireland boss.
He has filled that position before, guiding the Irish to the 2002 World Cup towards the end of a six-year spell in the hot-seat.
A man who was capped on 57 occasions by Ireland during his playing days is now believed to be the top choice of the FAI to fill their coaching void once again.
Smith acknowledges that there is little the Ipswich squad can do to influence proceedings, but would be disappointed to see McCarthy leave after steadying the ship at Portman Road.
He said in the Green Un: "We've just got to get on with our jobs - if it happens, it happens.
"We don't want him to, though, because he's been really good for us.
"He's now had the chance to build his own squad, the performances have been good and there is a feeling we've got something to build on. A change of manager means starting all over again, so we really want him to stay.
"He gets the best out of his players. He's not shy to have a laugh and a joke with the lads, at the right time, but when he needs to be serious he's that man too. He's got great man-management skills.
"It would be magnificent if he stayed."